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A federal tax lien can be placed on any property owned by a person who is behind in his or her IRS taxes. This lien, sometimes known as a general or statutory lien, is attached to the taxpayer's property as well as to the right to own property, which is important if you are considering a property purchase yet also owe back federal taxes. In most cases, if you set up and follow a plan to pay back taxes, the lien will be removed after you have successfully repaid a specific amount of the taxes owed.
In most situations, the taxpayer is provided with several letters of warning and requests for payment of back taxes or current taxes before a federal tax lien is used. In addition, the taxpayer is notified by mail, typically registered mail about the lien. However, in some situations, particularly in divorce or in other cases of joint ownership, one or more of the property owners may be unaware of the tax lien. In these situations, a title search may be required to check whether there are any types of liens or encumbrances on the property. Title companies can complete title searches, but there is a fairly significant charge in place for this service.
If you currently have a mortgage on your property, checking with your lender about liens on the property may also be an option. Again, this can be a complicated situation; thus, working with a tax attorney or real estate attorney to find this information is always highly recommended.
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